Engineering & Mining Journal

OCT 2018

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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REGIONAL NEWS - LATIN AMERICA 14 E&MJ • OCTOBER 2018 The Last Blast at Chuqui By Oscar Martínez Bruna, Latin America Editor ANTOFAGASTA, Chile–September 9, 2018, will undoubtedly mark one of the most important milestones in the histo- ry of mining in Chile. That day, the last blast was heard at the deepest level of the largest open-pit copper mine in the world. The Chuquicamata mine, owned by the Chilean state-owned company Codel- co, is celebrating 103 years as a standard of copper mining in Chile and as one of the world's leading copper producers. It is also preparing for its transition to an un- derground mine. The idea is to transform "Chuqui" into a technologically advanced underground "super mine" that will use the block-caving process and prolong the life of the mine in at least 40 years. In its origins, the nortino mineral of Chuquicamata was exploited by the indig- enous peoples of the area, the "Chucos" Indians, who were the first to discover the properties of copper and worked it to make tools and weapons. From them comes the name, "Chuquicamata," whose meaning is "limit of the land of the Chucos" and also "Punta de Lanza." After belonging to the North American mining companies Chile Exploration Co. and Anaconda Copper Min- ing Co., in 1969, the state of Chile acquired 51% of the shares and, after the national- ization of copper, in July 1971, Chuquica- mata passed to be 100% Chilean. On April 1, 1976, Codelco the largest state-owned company in the history of Chile, the basis of its economy, was created and Chuquica- mata became an integral part of it. Last year, Chuquicamata produced 330,000 tons of copper, while the rest of Codelco's operations produced 1,734 million tons. The company has projected that the annual production of the mine, after its transition from open pit to un- derground, will be 320,000 tons of fine copper and 15,000 tons of molybdenum. It is necessary to clarify, however, that this "Last Blast" had a more ceremonial significance since the extraction in the open pit of 1,100 meters will continue, but only until the so-called "Phase 49," and the blasting will decrease in frequen- cy and in the amount of energy released until mid-2020. Codelco's plan is to start underground operations in July 2019, but this new phase will begin with a mixed extraction process. Argentina Rolls Out Export Tax On September 4, the Argentinian Exec- utive Branch issued Executive Order No. 793/2018 establishing an export tax of 12% over all goods exported from Ar- gentina, applicable from September 4, 2018, to December 31, 2020. The tax is capped at AR$4 per U.S. dollar for bul- lion and unrefined gold, and at AR$3 per U.S. dollar for unrefined silver and zinc, copper and precious metal ores, and their concentrates. This action was part of a larger plan that included other austerity measures and invoking an International Monetary Fund assistance loan. Yamana Gold said its subsidiaries Minas Argentinas S.A. and Estelar Re- sources Ltd. S.A. would challenge the constitutionality of the export tax by fil- ing an action for the protection of consti- tutional rights pursuant to Article 43 of the Argentine Constitution, and an appli- cation for an injunction for the Argentine government to refrain from collecting this tax. The Argentina Constitution prohib- its the executive branch from creating taxes, according to Yamana, and estab- lishes that it can only exercise the leg- islative authority expressly delegated by the Federal Congress. Yamana owns the Gualcamayo and Cerro Moro mines in Ar- gentina and said it believes the export tax is unconstitutional. Gualcamayo and Cerro Moro are enti- tled to tax stability pursuant to Argentina's Mining Investments Law No. 24,196, the company said. "This tax stability entitles Yamana's subsidiaries to recover taxes in excess of their overall tax burden at the time of the filing of their feasibility stud- ies, in 2007 for Gualcamayo and 2012 for Cerro Moro, Yamana Gold added Yamana Gold to Invest US$75M in Chilean Operations Yamana Gold expects to invest about US$75 million Chile during this year, according to Yamana's vice president of finance, Chile and Argentina, Andrés Guzmán, in an interview published in the Mining Bulletin of Sonami (The National Mining Association of Chile). "We expect to invest approximate- ly US $75 million in sustaining capital and exploration at El Peñón and Minera Florida (located in Antofagasta and south of Santiago, respectively) during 2018," Guzmán said. In addition, the executive noted that Yamana's investments in Chile have been reduced compared to previous years due to the restructuring of El Peñón and the ongoing transition in Minera Florida. However, their plans aim to extend the life of their mines, which should ulti- mately lead to more sustainable long- term investments. As for the company itself, Guzmán ex- plained that the Canadian player is in a "solid position." "We are proud of the significant achievements of the first 15 years of our The prolific Chuquicamata mine in Chile begins its transition to underground operations.

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